World Bank revises Kuwait’s 2024 real GDP upwards to 2.8pc
KUWAIT, May 4, 2024
Kuwait’s economic growth (real GDP) projection for 2024 was revised by the World Bank to 2.8% y/y, higher than the 2.6% y/y forecasted earlier in January 2024 owing to expectations of phasing out of OPEC+ production cuts, according to Kuwait Financial Centre (Markaz).
However, the IMF has estimated Kuwait’s real GDP to contract by 1.4% in 2024, under the assumption that oil production cuts will continue into 2024, making it the only GCC economy which is expected to contract in 2024, stated Markaz in its monthly market review report for April.
Kuwait’s CPI rose by 3.02% in March with food and beverage segment rising by 5.71%.
According to data from the Ministry of Finance, Kuwait’s project spending during 2023-24 had been at KD345 million ($1.1 billion), amounting to a third of the planned capital expenditure of KD1.1 billion ($3.56 billion).
Project activity had also been muted in Q1 2024, with the value of project awards amounting to $327 million, down from $1.8 billion in Q1 2023. However, going forward, the project market is expected to be active with contractors preparing for big-ticket projects.
Real estate sales in Kuwait too declined by 2.3% y/y in Q1 2024, with residential and investment segments declining by 2.8% and 3.9% respectively, amid the high interest rate environment.
According to Markaz, Kuwait equity market declined for the month, pressured by geopolitical tensions. However, positive Q1 earnings cushioned the market decline, according to a report by Markaz. Boursa Kuwait All Share (PR) index fell 3.8% in April amid broad-based declines.
Kuwait and broader GCC markets were pressured by the escalation in geopolitical tensions while corporate earnings and positive economic outlook from World Bank lent some support.
Global markets declined for the month as persistent inflation in the U.S. led to concerns about possible delays in interest rate cuts by the US Fed.
The IMF has estimated GCC’s real GDP growth for 2024 at 2.4%, revised down from 3.7% forecasted in October 2023, citing production cuts, geopolitical tensions, and shipping disruptions in Red Sea.
However, the agency expects growth to rebound to 4.9% in 2025 driven by strong non-oil economic activity and a pickup in hydrocarbon production.
Saudi equity index fell by 0.1% during the month even as strong corporate earnings lent support to markets. Saudi Aramco fell 2.4% during the month. Al Rajhi Bank and Saudi National Bank (SNB) fell 2.9% and 6.5% respectively during the month. Al Rajhi bank has reported a 6% y/y increase in its net profit for Q1.
The Dubai equity index declined by 2.1% during the month. The share price of Emirates NBD declined by 2.9% despite its net profit for Q1 2024 rising by 12% y/y. The rise in net profit was supported by higher income and recoveries on impaired loans. Salik Company declined by 7.5% for the month.
The Abu Dhabi equity index declined by 1.7% during the month. FAB’s shares fell 5.6% during the month. Qatar equity index fell 1.2% even as natural gas prices staged a recovery.
Saudi Arabia’s revenue from the non-oil sector had amounted to USD 453 billion in 2023, the highest level in the country’s history.
According to UAE’s PMI survey, while business conditions have been robust, businesses are facing administrative delays and increased supply constraints due to the Red Sea shipping crisis.-TradeArabia News Service
